The Square Foot

Canadian Tire Corporation, Limited (Canadian Tire) and CT Real Estate Investment Trust (CT REIT) announced today that CT REIT has filed and obtained a receipt for a preliminary prospectus in respect of its initial public offering of trust units with the securities regulatory authorities of all provinces and territories in Canada.

Canadian Tire has taken the initiative in establishing CT REIT in order to create an investment grade public real estate entity that would allow CT REIT to benefit from its relationship with Canadian Tire to generate reliable, durable and growing monthly cash distributions on a tax-efficient basis.

The portfolio of properties to be acquired by CT REIT from Canadian Tire on closing will consist of 256 properties totaling approximately 19 million square feet of gross leasable area (GLA), consisting of 255 retail properties located across Canada and one distribution centre (the Initial Properties).

Overview

The aggregate purchase price for the Initial Properties to be acquired from Canadian Tire will be determined in connection with the pricing of the Units.

Canadian Tire will be CT REIT's most significant tenant for the foreseeable future with Canadian Tire retail stores and the distribution centre, which supports Canadian Tire Retail's operations, representing approximately 95.7% of CT REIT's base minimum rent in 2014.

On closing, CT REIT will enter into leases with Canadian Tire in respect of Canadian Tire retail stores with staggered initial terms ranging from 10 to 21 years, with a weighted average initial term of approximately 16 years, and CT REIT and Canadian Tire will enter into a lease in respect of the distribution centre with an initial term of 17 years.

Canadian Tire views the creation of CT REIT as a preferred structure by which it can continue to own a significant interest in its Canadian Tire retail store properties while surfacing the value of its real estate and believes that continuing to own a majority interest in CT REIT is consistent with its long-term strategy.

The offering of Units is being joint bookrun by RBC Capital Markets and CIBC.

The REIT has been assigned a provisional issuer credit rating of "BBB (high)" by DBRS and "BBB+" by S&P, both with a "stable" outlook. In addition, after considering the REIT transaction, both rating agencies recently confirmed Canadian Tire's credit ratings of "BBB (high)" and "BBB+," respectively, each with a "stable" outlook and Canadian Tire expects that both rating agencies will confirm those credit ratings following closing.